Thu Aug 3 19:07:17 EDT 1995
================= ECONHIST.TEACH POSTING =================
Regarding teaching law and economics:
I find this topic very frustrating because the research exists
in separate boxes all over the place.
With my training as a Jack Greene student at Hopkins in early
American social and politial history, I am intensely aware that both
legal and political tradition in America extend way before 1787, yet
little in the legal or economic literature on the subject acknowledges
that. Both of these specialties possess (IMHO) a rather naive view
of the provincial and rudimentary state of American institutions in
the 1700s, that is completely at odds with the current state of the
literature on early America.
The result is rather circular.
Legal scholars are absolutely obsessed with the concept of
law=contracts=market stability=business. But as we were just reminded,
there are two sides to a contract, and at one time the expectations
that labor and consumers had for businesses was every bit as significant
as the expectations of the latter for the former.
Furthermore, the formalistic approach to law -- appeal to
precedence, rigid and narrow interpretations of contracts, is the
result of a transformation in the system through the 1800s, not the
system as it stood in the 1700s. Certainly, by the end of the 1700s
a trained legal sector had emerged that earned its keep dealing with
debt collection and land disputes, but the citizenry still considered
law and the government (and economics) to consist of far more than
this single component. Over the nineteenth century, however, it would
appear that the scholarly approach focused increasingly on the law
as contracts, the law as property rights. I have seen some recent
literature positing that it has gotten to the point right now that
the courts rather dysfunctionally relate to ALL legal issues as if it
was an issue of property rights (for example, the "right" of the
homeless to "possess" a portion of the sidewalk; the "ownership
rights" of a natural father to a child that has been adopted by
another couple). It is of course the tone of the recent literature
that this is an "of course" -- that of COURSE a capitalist system
would create a narrow, one-sided legal system designed to enforce3
what benefits business (and upper-class males, no offense to anyone
here, but taking in mind who makes the laws and most of the rulings).
No one here has to agree with me, but it is my own argument that
there is nothiung about a market economy that NECESSITATES such a
narrow-minded approach to the civic sphere.
At any rate, what I see is this: legal scholars use theories
of the nature of the law and government derived from the legal
studies of British scholars, begiunning with the Enlightenment,
and becoming embedded in a legal culture in both Britain and America
by the turn of this century. Property as a Thing, possession as a
"natural right", and contracts as the central feature of civilization
is simply accepted as a given. While there have been studies in
the sociology of knowledge about law school culture and resulting
legal culture, I don't know of too many about the origins of this
culture.
Here's an example: the Quakers had very sophisticated bankruptcy
proceedings within their system of Monthly meetings. Non-Quakers
sometimes asked the Monthly Meetings to solve THEIR financial woes.
Since legal culture and legal scholarship does not recognize activities
outside the formal structure of laws and court decisions, the
scholarship in this area seems completely oblivious to this. legal
scholars seem convinced that bankruptcy proceedings in the U.S. were
totally a product of the economic changes of the early 1800s. Other
scholars have extrapolated from this supposed "fact" to draw conclusions
about how perceptions of markets and ecnomics supposedly changed to
PERMIT the concept of bankruptcy, without being at all aware that the
concept was alive and well a good century before it was supposed to have
been.
Arriving by lengthy route at the meaning of this for TEACHING
economic history via business law and court rulings:
You hve to be careful about the interpretive constraints in this
literature. You may find yourself unconsciously introducing beliefs
about the CAUSES and consequences of these rulings that are
contradicted by the rsearch of the past 3 decades in early American
history. What I see as an overemphasis on a flat-footed conception
of economics as being based mainly on the Ownership of Things and
Written Contracts -- within the scholarship on business law -- will
also creep into your interpretation. Compare, for example, some
of the standards about important legal decisions in the 1800s with
respect to business-labor relations -- and the implications for a
theory of optimal business-labor relations in a market -- with the
assumptions in the new labor ecnomics today.
As it happens, much of the literature on these issues stems from
the older school of institutional economics -- nothing wrong with that,
but you need to keep a lookout on the inherent contradictions between
some of the assumptions in that literature, and assumptions in the
current literature today. In other words, this stuff has got to be
carefully contextualized for your students.
I am personally intrigued by what happens when a rigid belief
in law=contract enforcement meets the Coase concept of implicit
contracts. I think it is taking us into the area of
law=implicit contract enforcement, which has real fuzzy boundaries.
But -- that's my own interests.
I do think these court cases are quite significant, but I just
wanted to warn those who would use them in class to be careful of
the implicit conclusions within muchof that literature with regard
to contracts, markets, and economic justice -- and with regard to
the "primitive" nature of the American legal system pre-1800.
-- Mary Schweitzer, Assoc. Prof., Dept. of History, Villanova
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